AUD/JPY bulls back in the driver's seat, eye break of 75 level

• AUD/JPY is trading towards a break of the 75 level as risk appetite remains elevated. 
• COVID-19 cases in there US have been sidestepped by investors expecting a continued economic global recovery. 

AUD/USD was on the front foot overnight and was lifting the crosses higher with it as US dollar outflows supported risk-FX.

At the time of writing, AUD/JPY is trading at 74.96 between a range of 74.84 and 74.97. 

The price of the Aussie has been choppy this week as bulls press against a longer-term resistance with failures for the most part. 

In price action overnight, the Australian dollar staged a minor comeback following yesterday's risk-off session. 

The currency was able to stage a rally in New York despite spiking COVID-19 cases underpinning. A break above 0.7000 vs the greenback targets the June 10 trend high at 0.7069 which would bring the crosses up into positive territories also.

AUD/JPY bulls will be looking for continued optimism in a vaccine and economic recoveries, supporting commodity prices and taking the dollar lower in its pursuit of the mid 76 level. 

However, a potential spanner in the works comes as the US-China tensions are seen simmering. The US’s Kudlow said the US has issues with China but a trade deal is not dead. markets will be keeping a close on these developments. 

Meanwhile, the surge in COVID-19 infections is gradually gripping the commodity market, analysts at ANZ Bank argued, noting the price action across the sector from yesterday:

Energy traded in a tight range as the pandemic’s long shadow cooled demand prospects. Metals prices recouped their early session losses, as supply disruption outweighed the demand damage. Bulks are enjoying the broad based rally in the Chinese financial market. Bullion benefitted from safe-haven demand and a weaker US dollar, with the gold price breaking USD1,800/oz. The ANZ China Commodity Index rose by about 1% on Wednesday.

US cases of COVID-19 surpassed three million overnight

US cases of COVID-19 surpassed three million overnight. Dr Fauci said Phase 3 vaccine trials may begin at the end of July, and he is cautiously optimistic for a vaccine by year-end.

No plans to reimpose coronavirus restrictions across Aus

Despite the resurgence of COVID-19 cases in Victoria, the underlying optimism over Australia’s post-pandemic recovery.

Prime Minister Scott Morrison says there are no plans to reimpose coronavirus restrictions across the country after the Melbourne outbreak prompted the closure of state borders and a citywide lockdown.

AUD/JPY levels